Will broaden Paladin portfolio for pain relief
Paladin Labs of Canada is to purchase Labopharm, a Canadian biotech company specialising in controlled-release drugs, strengthening its pain portfolio in emerging markets.
The Montreal firm will pay CA$0.28 per share in cash for Labopharm, valuing the company at around CA$20m (US$20.4m).
The companies said the price represents a 57.4% premium over the volume-weighted average of 18 cents per share in the 30 trading days prior to the announcement.
The Labopharm board have approved the deal.
‘The board of directors has concluded that this all-cash offer, which is at a significant premium to the trading price of Labopharm’s shares, is the best way to maximise shareholder value,’ said Labopharm chairman Santo Costa.
Jonathan Goodman, Paladin’s ceo said the acquisition represents a ‘unique opportunity for us to further strengthen our pain franchise through the addition of an established revenue stream in international markets with the potential upside provided by several product candidates’.
Labopharm produces the antidepressant Oleptro and pain reliever Tramadol as well as Tramadol-acetaminophen. It also has other drugs in development.
Paladin has several pain relief drugs including Abstral, which manages pain for cancer patients, and Metadol for acute cancer pain.
Goodman added: ‘Labopharm\'s expertise and experience around its products and technologies, both in Canada and internationally, will complement our existing capabilities as we execute our growth strategy.’
Completion of the deal is subject to the approval of two-thirds of Labopharm shareholders as well as regulatory approvals.
Labopharm experienced a number of setbacks in the first half of this year and announced a strategic review in March after appointing a new chief executive and cutting 38 jobs.
In May the firm reported a first-quarter loss of CA$12.4m, mainly owing to costs associated with the job cuts, and in June delisted from the NASDAQ. A further 23 jobs were cut in July.